Research >> Economics
2Q2019 Current Account Deficit Decreased
The U.S. current account deficit narrowed by $8.0 billion, or 5.9 percent, to $128.2 billion in the second quarter of 2019, according to statistics from the Bureau of Economic Analysis. The revised first quarter deficit was $136.2 billion. The second quarter deficit was 2.4 percent of current dollar gross domestic product, down from 2.6 percent in the first quarter.
The $8.0 billion narrowing of the current account deficit in the second quarter mainly reflected an expanded surplus on primary income. Exports of goods and services to, and income received from, foreign residents increased $2.1 billion, to $943.0 billion, in the second quarter. Imports of goods and services from, and income paid to, foreign residents decreased $5.9 billion, to $1.07 trillion.
Trade in Goods
Exports of goods decreased $4.5 billion, to $414.6 billion, mainly reflecting a decrease in capital goods, mostly civilian aircraft. Imports of goods increased $2.0 billion, to $637.9 billion, led by an increase in industrial supplies and materials. Changes in the other major categories were nearly offsetting.
Trade in Services
Exports of services decreased $0.1 billion, to $207.8 billion, reflecting nearly offsetting changes across major categories. Decreases were led by travel, mainly other personal travel, and increases were led by other business services, mainly professional and management consulting services. Imports of services increased $0.2 billion, to $147.8 billion, also reflecting nearly offsetting changes across major categories. Increases were led by insurance services, mainly reinsurance, and decreases were led by transport, mostly sea freight transport.
Receipts of primary income increased $7.1 billion, to $285.2 billion, mostly reflecting increases in portfolio investment income, mainly dividends on equity securities, and in direct investment income. Within direct investment income, dividends were $88.3 billion in the second quarter and remain elevated since the passage of the 2017 Tax Cuts and Jobs Act, which generally eliminated taxes on repatriated earnings beginning in 2018. For more information, see “How do the effects of the 2017 Tax Cuts and Jobs Act appear in BEA’s direct investment statistics?” Payments of primary income decreased $3.7 billion, to $217.6 billion, mostly reflecting a decrease in direct investment income.
Receipts of secondary income decreased $0.3 billion, to $35.5 billion. Payments of secondary income decreased $4.5 billion, to $67.9 billion, mostly reflecting decreases in U.S. government grants and in private sector payments of fines and penalties.
Posted: September 19, 2019 Thursday 08:30 AM